Introduction
Photovoltaic solar energy has been recognized as one of the key instruments in the global energy transition, both for its potential to reduce greenhouse gas emissions and for enabling new models of access to electricity. Brazil has emerged as a global leader in this field, rising from 20th place in 2018 to 6th place worldwide in installed capacity in 2024, reaching 53,113 MW according to IRENA data. This achievement is the result of a gradual historical process marked by regulatory developments and targeted public policies.
1. Early Milestones
The energy crisis of 2001 represented a turning point for the Brazilian electricity sector. In response, the government established the Alternative Energy Sources Incentive Program (PROINFA) through Law No. 10,438/2002. The program sought to diversify the national electricity matrix and promote renewable sources such as wind, biomass, and small hydropower plants. However, photovoltaic solar energy was not included in the program’s initial phases, which delayed its structured integration into the domestic market.
Solar power only began to gain meaningful traction in 2014 through its participation in reserve energy auctions. Even then, the first auctions revealed prices significantly higher than those of competing energy sources, limiting its competitiveness. Between 2012 and 2020, however, the average price of imported solar modules fell by 76%, dramatically improving the economic viability of the technology in Brazil.
2. The Emergence of Distributed Generation and Net Metering
In 2010, ANEEL approved the Regulatory Agenda of the then Distribution Services Regulation Superintendence (SRD), identifying the reduction of barriers to small-scale generators’ access to distribution networks as a key objective. This initiative led to Technical Note No. 0043/2010, which examined the distributed generation landscape in Brazil and in developed countries.
Countries such as Germany, Japan, and the United States had already implemented different renewable energy incentive models, which served as references for ANEEL’s studies. Among the mechanisms analyzed were:
Feed-in Tariff (FIT): a fixed remuneration per kilowatt-hour injected into the grid, guaranteed through long-term contracts.
Green Certificates: renewable generation quotas imposed on distribution companies.
Net Metering: an accounting mechanism through which excess electricity generated is converted into credits that may be used to offset future consumption.
Direct Subsidies and Tax Incentives: financial incentives supporting the installation of renewable energy systems.
Still in 2010, ANEEL launched Public Consultation No. 15/2010 to design a regulatory framework more suitable for small-scale generation. The process culminated in Technical Note No. 0004/2011, which consolidated 577 contributions from various stakeholders and focused on simplifying grid connection procedures, establishing specific rules for small generators, and assessing the adoption of the Net Metering model in Brazil.
As a result, in 2012 ANEEL issued Normative Resolution No. 482, creating the Electric Energy Compensation System (SCEE) based on the Net Metering model. This choice reflected a strategy aimed at encouraging small-scale distributed generation without significantly increasing electricity tariffs. ANEEL recognized that, although a feed-in tariff would provide stronger incentives for investors, it would also require tariff increases for all consumers, conflicting with the principle of tariff affordability. Net Metering, therefore, was viewed as the most appropriate solution for Brazil’s regulatory and economic context at the time.
3. Regulatory Improvements and New Incentives
In the years that followed, the regulatory framework continued to evolve. Normative Resolution No. 687/2015 expanded distributed generation opportunities by allowing shared generation projects, remote self-consumption arrangements, and developments serving multiple consumer units. It also extended the validity period of energy credits from 36 to 60 months.
During the same period, tax policies played a fundamental role. ICMS Agreement No. 16/2015 authorized an exemption from state VAT (ICMS) on compensated energy, while Law No. 13,169/2015 exempted injected energy from PIS and COFINS taxes. At the federal level, the Distributed Generation Development Program (ProGD) was launched in 2015 with the goal of mobilizing up to BRL 100 billion in investments by 2030.
4. The International Experience: Germany and the United Kingdom
When comparing Brazil’s trajectory with that of other countries, we observe quite distinct approaches. Germany, for example, has implemented a consistent policy to promote renewable energy since the 1990s, culminating in the Renewable Energy Sources Act (Erneuerbare-Energien-Gesetz – EEG) and in the energy transition policy known as Energiewende.
This legislation introduced the feed-in tariff (FIT), which guarantees solar energy producers fixed remuneration per kWh injected into the grid, under long-term contracts, usually lasting 20 years, thereby providing predictability for investors. In addition, the country established mandatory national targets for the share of renewables in the energy matrix, a priority dispatch system for clean energy, and an obligation for distribution companies to purchase all energy generated from these sources.
This set of measures allowed Germany to reach more than 89,000 MW of installed solar capacity, despite having solar irradiation significantly lower than Brazil’s.
The United Kingdom, in turn, followed a different path in promoting solar energy. After an initial period of strong expansion, driven by the adoption of feed-in tariffs and other incentive mechanisms, the country gradually reduced its support for distributed generation.
The elimination of the FIT, combined with the absence of new compensatory policies and the weakening of subsidies, undermined the sector’s momentum. As a result, the pace of installed capacity growth slowed significantly in recent years, leading the country to reach approximately 17,600 MW of solar capacity — less than half of Brazil’s installed capacity in 2024.
This case highlights the risks of regulatory discontinuity and the importance of stable public policies to sustain the long-term development of renewable energy sources.
5. The Legal Framework for Distributed Generation and Future Challenges
The accelerated growth of micro and mini distributed generation in Brazil over the past decade, driven by a set of regulatory and tax incentives, brought to light the need to review the existing model. Although Normative Resolution No. 482/2012 was innovative at the time, it began to generate debates regarding its tariff impacts and the economic balance among different grid users.
The main criticism concerned the full valuation of compensated energy, without proportional charges for the use of electricity infrastructure, which, according to some technical positions, could compromise the principles of tariff affordability and fairness.
In this context, and after intense debates among sector agents, civil society, and regulatory bodies, Law No. 14,300/2022 was enacted, establishing the new legal framework for distributed generation in Brazil.
The legislation consolidated rules for the Electric Energy Compensation System (SCEE) and established an important regulatory transition: consumers who submitted access requests by January 7, 2023 would maintain the previous rules until 2045, while systems connected after that date would follow a compensation model with a gradual reduction of benefits.
The regulation of Law No. 14,300 was assigned to ANEEL, which, through Normative Resolution No. 1,059/2023, detailed the technical and operational aspects of the new regime. Among other points, this resolution defined the charges to be gradually assumed by new distributed generation users, with the objective of promoting greater alignment between grid use and associated costs.
These changes reflect a moment of institutional and technological maturity. The significant decrease in photovoltaic system prices, combined with the sector’s increased scale and professionalization, indicated that the incentive model originally designed for a high-cost scenario was no longer compatible with the current reality.
The legislation therefore sought to update the regulatory framework without compromising the progress already achieved, while paying special attention to the economic sustainability of the system as a whole.
6. Final Considerations
The trajectory of public policies aimed at promoting solar energy in Brazil reveals a path of regulatory and strategic advances that, over more than two decades, consolidated solar power as a viable and relevant alternative in the energy matrix.
The adoption of the Net Metering model was guided by criteria of feasibility and regulatory caution and has required — and still requires — constant improvement to ensure a balance between sustainability, accessibility, and tariff fairness.
Despite the progress achieved, the policy of encouraging distributed generation through photovoltaic solar energy currently faces significant challenges that require attention from policymakers. The accelerated expansion of micro and mini generation in certain regions has led to oversupply and saturation of distribution networks, imposing technical limits on the flow of energy.
In addition, delays in the processing of connection requests and the operational burden on distribution companies have created challenges, as distributors are often unable to meet growing demand with the necessary speed.
At the institutional level, the regulatory environment has proven unstable, with successive legislative attempts to include provisions unrelated to the main purpose of bills — the so-called “jabutis” — as occurred in the Offshore Wind Law. This type of legislative insertion creates perceptions of legal uncertainty and may negatively affect the long-term investment environment.
Another relevant issue under debate in the electricity sector is the opening of the market to low-voltage consumers, a process that has generated disputes between generators and distribution companies. While generators see liberalization as an opportunity to expand competition and attract new consumers, distributors are concerned about the economic and financial imbalance resulting from load migration, especially in a context where a significant portion of fixed grid costs continues to be shared among the remaining captive consumers.
This structural change directly affects the sustainability of the distributed generation compensation model and reinforces the need to rethink cost allocation in the sector. In this scenario, it is urgent to improve transition rules, clearly define the responsibilities of each agent, and strengthen stable, technical, and transparent regulatory governance, always respecting the acquired rights of the agents involved.
The development of photovoltaic solar energy in Brazil, especially through the distributed generation model, remains in a process of consolidation and transformation within the electricity sector. The current scenario imposes the challenge of balancing technological advances and market expansion with the need for a stable, transparent regulatory framework adapted to the sector’s development.
In addition, the significant increase in the number of projects creates relevant operational impacts, requiring the agents involved — such as distributors and regulators — to be properly structured to ensure speed and predictability, which are essential conditions for the orderly development of the model in Brazil.